Costco eyes broader India tech footprint as AI bets grow

By Rishika Sadam

HYDERABAD, Nov 12 (Reuters) - US retailer Costco COST.O sees room to expand its technology presence in India beyond Hyderabad as it accelerates international growth, with its first global capability centre playing a key role in artificial intelligence and cybersecurity, a top executive said.

The Hyderabad centre, which employs more than 70 people, supports global operations and is expected to grow to several hundred staff over the next five to six years, Javier Polit, Costco's chief information and digital officer, told Reuters on Thursday. He did not give a specific hiring target.

"We're going to grow our business internationally at a greater velocity than we have been in the past. So there'll be more presence in this geography for sure," Polit said, adding that India was already playing a key role in the retailer's growth plans.

AI has delivered productivity gains of up to 60% in some technology projects, Polit said, prompting Costco to build more tools in India for global deployment, including a Hyderabad-developed geofencing tool that identifies customers approaching stores to speed check-in and checkout.

The Hyderabad centre will also support data and analytics, business software and digital advertising operations, Polit said.

Over time, Costco expects the mix of its technology workforce to shift to about 75% employees and 25% contractors, from roughly an even split today, as it builds more in-house engineering and technology capabilities, Polit said.

Costco set up its Hyderabad GCC with support from consulting firm ANSR, a move Reuters reported last year could eventually employ about 1,000 people.

Global capability centres, once used mainly by multinationals to cut costs, now drive higher-value work in areas such as technology, finance, product development and research.

Costco, one of the world's largest retailers, operates a membership-only warehouse club business across North America, Europe and Asia. The company has built a loyal customer base through its low-price, bulk-buying model and has continued to expand globally amid resilient consumer demand.